New York — Responding to the drubbing it has received from rival Hewlett-Packard in the consumer personal computer market, Dell announced a major shift in its strategy with plans to begin selling desktop PCs at Wal-Mart, the world’s largest retail stores.
The move marks a major push by Dell into the retail market after years of relying on direct sales through the mail, phone orders and the internet.
A Dell spokesman said Thursday the computer maker will begin selling two models from its Dimension desktop computer line in about 3,000 Wal-Mart stores in the United States, Canada and Puerto Rico, they will be sold bundled with accessories at prices below $700 each, beginning June 10.
Dell spokesman Dwayne Cox said the Wal-Mart deal “represents our first step” into global retail.
"Customers want more and new ways to buy our products, and we plan on meeting their needs on a global level," Cox said. "Offering Dell Dimensions in Wal-Mart is a great example of this approach."
It is hoped the strategy will boost Dell’s chances against Hewlett-Packard, which overtook Dell last year as the world’s biggest PC maker.
Since its founding in the 1980s, Dell was the king of the hill in PCs. It viewed direct sales as an important cost advantage over competitors who sold computers through retailers.
But as the biggest growth in PCs has come from notebooks and the mobility trend, Dell has lagged behind. Consumers and business users alike prefer to touch and test a laptop in a store or in a kiosk to satisfy their purchase.
Last year, the Round Rock, Texas-based Company lost its lead to a revitalized Hewlett-Packard, which now sells systems online, by phone and in stores.
"They have had a series of missteps," said Samir Bhavnani an analyst with Current Analysis West. "They have had a tough period in the past two years."
Founder and Chairman Michael Dell returned to lead the firm’s recovery earlier this year after then — CEO Kevin Rollins resigned amid lower profits and sagging sales.
Morningstar analyst Rick Hanna said Michael Dell was "the right person" to adjust the company’s strategy.
"I think we are seeing the logic of him stepping back in the CEO role, because if anybody could empower the company to move in a new direction, it is the guy who founded it," Hanna said.
The firm, founded by current chief executive Michael Dell in 1984, has struggled with slowing sales, complaints of poor service and a Securities and Exchange Commission investigation into its earnings.
Cox said Dell will announce additional retailers in the coming quarters, but he declined to give specifics.
"In the coming quarters, there will be additional activity in support of this move into global retail," said Dell spokesman Bob Pearson.
"Today’s announcement with Wal-Mart represents our first step, but no further details were given…stay tuned."